Mortgage/ LTV

In plain words

LTV (loan-to-value) is a ratio that shows what share of a property’s value the bank is prepared to finance. If the LTV is 60%, the bank lends 60% of the price and you pay the remaining 40% yourself. The lower the LTV, the more money you need at the outset.

For a foreign non-resident buyer the terms are almost always stricter than for locals: a lower share of financing, a higher rate and more document requirements. The bank looks at confirmed income, the source of the down payment and the property itself as security — it will not finance an illiquid property.

The key point for immigration programmes: many of them require the investment to be made with own funds. A mortgage may not count at all, may count only to the extent of the own contribution, or may be allowed above the minimum investment amount. The rule is checked before applying for the loan, not after.

When a mortgage is considered

What the bank assesses

How the process goes

1. 01Check the programme’s conditions
2. 02Preliminary approval from the bank
3. 03Valuation of the property
4. 04Approval and signing
5. 05Registration of the charge and the deal

What you need to know

• For non-residents LTV is usually lower and the rate higher
• The bank checks the source of the down payment
• Currency risk arises when income is in another currency
• The property is charged as security until the loan is fully repaid
• Many programmes require the investment to be made with own funds

Common mistakes

• ✕Planning a programme investment funded by a loan without checking the conditions
• ✕Not taking currency risk into account when income is in another currency
• ✕Forgetting fees, insurance and valuation
• ✕Applying for a loan without preliminary approval
• ✕Not checking the consequences of early repayment

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